The CSI Effect

Jurors with less education demand scientific evidence.  Educated jurors trust the prosecutor.

History can be funny.  Typically, progress comes from ferment.  People in cities interact in multipicative modes.  Entrepreneurs, artists, and scientists attract others of their kind.   Alternately, the peripheries bring new ideas to the centers.  Eastern Michigan University is a midrange midwest state school, located in Ypsilanti, in the shadow of its neighbor in Ann Arbor.  Unlike the U of M, EMU prides itself on teaching, not research.  Generally, the graduate students do not teach classes: they are GAs, clerical assistants, not TAs.  Classes are taught by the professors whose names appear in the course schedules.  Originally the Michigan Normal College, its motto is "Education first."  It is from EMU that Gregg Barak, Young S. Kim, and Donald E. Shelton published their paradigmatic research into juror attitudes.  "The CSI effect" did not originate with them, but they have produced the most rigorous statistical studies of it. 

Gregg Barak describes himself as a "dialectician."  He can argue any side of any topic equally well.  Among his many focus studies is the relationship between crime and the mass media reporting of it.  Young S. Kim specializes in research methods. Donald E. Shelton serves as the Chief Judge of both the Circuit and Probate Courts in Washtenaw County.  So far, they have co-authored three papers investigating and explaining the "CSI Effect."  

• "Examining the 'CSI-effect' in the cases of circumstantial evidence and eyewitness testimony: Multivariate and path analyses," by Young S. Kim,  Gregg Barak, Donald E. Shelton; Journal of Criminal Justice 37 (2009) 452–460.
• "A Study of Juror Expectations and Demands Concerning Scientific Evidence: Does a 'CSI Effect' Exist?" by Donald E. Shelton, Young S. Kim, Gregg Barak, Vanderbilt Journal of Entertainment and Technology Law Vol 9 No 2; 367.
• "An Indirect-Effects Model of Mediated Adjudication: The CSI Myth, the Tech Effect, and Metropolitan Jurors' Expectations for Scientific Evidence." by  Donald E. Shelton, Young S. Kim, and Gregg Barak, Vanderbilt Journal of Entertainment and Technology Law Vol 12 No 1. (Fall 2009)

They found that less educated jurors demand scientific evidence, whereas jurors with more education accept the prosecutor's statements prima facie.  More deeply, they theorize not a specific "effect" attributed to a widely popular franchise of television shows, but rather a general "tech effect."  They attribute that to the pervasive facts that reveal widespread ownership of iPods, laptops, and other devices among even the poorest and least educated members of jury pools.  

Karl Marx and the Dustbin of History

Like the death of Mark Twain, the imminent passing of capitalism has been predicted (or reported) for 150 years. 

Plotting the past and future of humanity is an old hobby.  In the Dialog "Cratylus", Plato recounts the story from Hesiod (Work and Days) that once, there was a Golden Age but continuous devolution has brought us to the Fifth Age, the Age of Iron, the age of war and injustice.  This, of course echoes the Eden Myth, that once upon a time, we lived in a paradise, but by our errors, we lost it.  Christianity promises a return to Paradise in the Afterlife for God’s “chosen” who find Salvation through His Son.  Karl Marx and Friedrich Engels secularized the myth by wrapping it in economics.  Marx’s theories are well-known.  His influence is undeniable.  However, Marx relied on the works of others to develop and validate his theories.  Some of the source material was in error.  Those who followed Marx –especially Marxists – accepted his assumptions without reconsideration. 

• Marx did not question the labor theory of value.  But if labor alone gives value, we could get rich by digging holes and filling them up.  The most careful workmanship invested in the most beautiful and useful object is wasted if no one else wants it.   Modes of television were invented in the 1890s.  The first personal computer was the IBM 5100 from 1975, a solution looking for a problem.  Labor does not give value.  Value is perceived by the buyer.
• It is famous that Marx predicted his proletarian uprisings in England or Germany and that the first so-called “communist” or socialist nation was an agricultural hinterland. 
• When Marx predicted that the workers would obtain the modes of production, he was not thinking of employee stock option plans or employees forcing leveraged buy-outs of their operating divisions from the parent corporation.
•  Marx complained that capitalism destroyed the natural state of women for motherhood and homemaking.
•  Relying heavily on English history, Marx pinpointed the closing of common lands and the mass migration of former serfs into the cities to become proletarians.  But that, too, happened in Rome.  Moreover, Roman expansion, especially into Gaul, but also elsewhere, was specifically the founding of new towns surrounded by new farms – a process exhibited by the archaic (pre-classical) Greeks who colonized Middle Earth from the Crimea to Spain.  
• Marx thought that gold was the highest form of commodity money and that money originated as commodity exchange in indirect barter.  This view is shared by capitalist (libertarian) economists today based on its being accepted by the Austrian School of Carl Menger and Ludwig von Mises.  The historical record does not support it.  
• Marx’s theory of dialectic evolution is unvalidated (and in fact disproved) against the historical record of places not known to him, such as China, Mesoamerica, and Sub-Saharan Africa. 

Largely today, in American university classes in economics, Marx is relegated the margins of first year textbooks. The new center is held by Milton Friedman and the monetists.  Diametrically opposite Marx but also in the margins are the radical Austrians, such as Ludwig von Mises who advocate laissez-faire (which Friedman did not).   

In sociology, Marx still holds sway.  Criticisms from the left come from postmodernists who claim that there is no reality and even if there were you could not know it.  (Physicist Alan Sokol who exposed and discredited that "fashionable nonsense" is a Marxist.) There is no "right wing" - no school of individualism - in sociology, or at least, they are few and far between.  Organizations and Markets is a blog from sociologists who are influenced by the Austrian school of economics.  The four professors - Nicolai J. Foss, Peter G. Klein, Richard N. Langlois, and Lasse B. Lien - span two continents. 

ALSO ON NECESSARY FACTS
Debt: the Seed of Civilization
Venture Capital
Money as Living History
Workers Paradise Promised an End to Money

City Air Makes You Free

Atlas Shrugged: Opening Show





History or Hysteria: When Did "the Great Depression" Begin?

No mythology faces as many problems as the folktale of The Great Depression. The Austrian economist, Ludwig von Mises, pointed out in Human Action that capitalists and socialists usually agree on the raw data, but then disagree on what the facts mean. In 1929, the New York Stock Exchange recorded dramatic price collapses on October 24 ("Black Thursday") and October 29 ("Black Tuesday"). What is missing is a connection between the NYSE of October 1929 and the banks of Detroit in February 1933. It was there, in Detroit, on February 14, 1933, 40 months later, and 600 miles away, that the bank failures of the Great Depression began.

To be sure, bank failures were common in the years before 1929-1933 – and so were bank openings. From 1884 to 1921, the number of banks had sextupled from 5000 to 30,000. Not only were these generally small banks – some capitalized near the minimum $25,000 – but after 1921, the new operations were often branches. The federal Comptroller of the Currency had opened the door to allow city banks to compete in towns and villages. From that point, bank failures increased, as is to be expected from increased competition. In January 1933, it seemed that the summer of 1931 had been the lowest point possible and that a recovery was unfolding. 

Depression-Era scrip issued by the City of Detroit
against property taxes due



            Speaking to a United Press reporter in Dearborn, on February 1, 1933, Henry Ford called the period 1923-1929 “the real depression.” At that time, two holding companies dominated finance in Detroit. One was the Detroit Bankers Company Group. The other was the Union Guardian Group, colloquially called “The Ford Group.” When the Union Guardian Group experienced pressure from withdrawals, it turned to the federal government for a loan. However, the Reconstruction Finance Corporation required that the Fords subordinate $7 million that the banks owed to them, which Henry Ford refused to do. President Herbert Hoover set up a meeting with Ford, Arthur Ballantine (Under Secretary of Treasury) and Roy D. Chapin (Secretary of Commerce). Chapin was a former Olds executive and co-founder of the Hudson Motor Car Company. He appealed to Ford as a fellow manufacturer. Ford replied that Hudson stock was traded on the NYSE, which Ford’s was not, and that a washout of the banking industry seemed inevitable. Chapin replied that if people do not have money to buy cars, Ford was in for hard times himself. Ford said that he felt young enough to start over from scratch. Ford said that everyone else ought to be prepared to get up a little earlier and work a little harder. He also said that he would withdraw his $25 million from the banks in the morning. He did not get to do that.

The next morning, February 14, 1933, Michigan’s governor, William Comstock, declared a banking holiday. The proclamation had been signed at 1:00 AM, published, and delivered to bankers when they arrived for the start of the business day. Two weeks later, outgoing President Hoover hesitated to declare a national bank holiday, so the newly-inaugurated President Roosevelt did just that. On March 21, 1933, the Michigan Legislature passed the McNitt-Green bill, granting the governor “dictatorial powers” over banks. Unlike Hitler, Mussolini, and Stalin – to whom he was favorably compared by newspapers in those troubled times – Gov. Comstock had modest goals and eventually declined further powers to control the insurance industry as well.

Anti-Trust

The evils of anti-trust are well-known.  

Anti-trust laws assume that there is a fixed inventory of extant goods and services, that all the widgets and gadgets are like mountains and rivers: they always existed and always will be here. In fact, these are in constant flux, coming into and going out of favor with changing perceptions of utility: 78 RPM records and 5.25-inch floppy disks, just for two. As Larry the Liquidator said, the surest way to go broke is to win an ever larger share of a dying market.

The other expression of that instance is the goods and services that come into existence from invention and entrepreneurship. What did not exist at all suddenly must be regulated, controlled, distributed, monitored and mandated.

The recent prosecutions of LCD display makers is a case in point. A hundred years ago, this was cholesterol from carrot juice. A generation ago, it was a fancy, an applied lab experiment. A decade ago, it was an emerging market. Now, for people to agree among themselves on production and distribution is a crime.

“TAIWAN HANNSTAR EXECUTIVE INDICTED FOR ROLE IN LCD PRICE-FIXING CONSPIRACY” at
http://www.justice.gov/atr/public/press_releases/2011/266070.htm
Goto the site and browse all the press releases back to June 2010.

January 13, 2011
TAIWAN HANNSTAR EXECUTIVE INDICTED FOR ROLE IN LCD PRICE-FIXING CONSPIRACY
Twenty-Two Executives Charged to Date in Global Price-Fixing Scheme
WASHINGTON — A federal grand jury in San Francisco returned an indictment against the current president of HannStar Display Corporation for his participation in a global conspiracy to fix prices of thin-film transistor liquid crystal display (TFT-LCD) panels, the Department of Justice announced today.
The indictment, filed today in U.S. District Court in San Francisco, charges that Ding Hui Joe, aka David Joe, conspired with others to suppress and eliminate competition by fixing the prices of TFT-LCD panels. Joe, a resident of Taiwan, is charged with participating in the conspiracy from on or about Sept. 14, 2001, until on or about Jan. 31, 2006.
TFT-LCD panels are used in computer monitors and notebooks, televisions, mobile phones and other electronic devices. By the end of the conspiracy period, the worldwide market for TFT-LCD panels was valued at $70 billion. Companies directly affected by the LCD price-fixing conspiracy are some of the largest computer and television manufacturers in the world, including Apple, Dell and Hewlett Packard.  

See these related prosecutions.
On the DoJ webpages you can search for the defendants or for TFT-LCD to find the full set of prosecutions and plea agreements.

http://www.justice.gov/atr/public/press_releases/2010/260175.htm
http://www.justice.gov/atr/public/press_releases/2010/264069.htmhttp://www.justice.gov/atr/public/press_releases/2011/266070.htm

http://nobelprize.org/educational/physics/liquid_crystals/history/
In the 1960s, a French theoretical physicist, Pierre-Gilles de Gennes, who had been working with magnetism and superconductivity, turned his interest to liquid crystals and soon found fascinating analogies between liquid crystals and superconductors as well as magnetic materials. His work was rewarded with the Nobel Prize in Physics 1991. The modern development of liquid crystal science has since been deeply influenced by the work of Pierre-Gilles de Gennes.

http://en.wikipedia.org/wiki/Liquid_crystal_display
Liquid Gold: The Story of Liquid Crystal Displays and the Creation of an Industry, Joseph A. Castellano, 2005 World Scientific Publishing Co. Pte. Ltd., ISBN 981-238-956-3.

Contemporary Reports: Panic or Puffery?

It is possible that the “Panic of 1857” is another anti-capitalist delusion?

 

Historians are trained in school to give precedence to first-hand accounts from newspapers, journals, and diaries.  However, even these must be evaluated against an objective standard.  Narratives depend on perspectives.

The anti-capitalists believe that fluctuations in prices, supplies, and demands are examples of the failure of society based on personal enterprise. The socialists claim that their government planned centralized economies would eliminate ups and downs, booms and busts, gluts and famines. History proved them half right.

We know about the "Panic of 1857" from history books that looked to sensational news stories about frenzied mobs of otherwise honest and intelligent folk hopelessly demanding the return of their hard-earned money from inept bankers forced to close their doors. The truth may be different – certainly more complicated – than this. The 1907 History of the United States by James Ford Rhodes gives the Panic of 1857 one line, never calling it by name. To Rhodes, the importance of the financial event was only that it temporarily drove “bleeding Kansas” from public attention. John Fiske’s History of the United States published in several editions by Houghton Mifflin from 1894 to 1907 says nothing about the Panic of 1857, mentioning instead the Dredd Scott Decision. However, Fiske does cover the Panics of 1837 and 1873. William Graham Sumner’s History of American Currency, published in 1874, does tell the story – including the loss of the S. S. Central America – but Sumner puts the word “panic” in quotes. Perhaps that is where it belongs.

Certainly, the Chemical Bank of New York, in its self-published history of 1913 is rightfully proud of its directors for having carefully managed the assets of depositors and thereby surviving whatever actually happened in the autumn in 1857.

We expect news to be objective, distinct from editorial comment. That was possible only after the estate of Joseph Pulitzer endowed an award fund to the Columbia School of Journalism in 1912. In the spirit of Pulitzer’s better side, the Pulitzer Prize Committee itself admits: “He crusaded against public and private corruption, filled the news columns with a spate of sensationalized features, made the first extensive use of illustrations, and staged news stunts. … Pulitzer was drawn into a bitter circulation battle with William Randolph Hearst's Journal in which there were no apparent restraints on sensationalism or fabrication of news.”


While it may well be true that "panic" was in the streets of New York City in the autum of 1857, the fact may be that this was a temporary, local event.  Bank failures - such as they were - were caused as much by the law as by economic reality.  State law demanded that banks make good on withdrawals by the end of the business day.  No other business was so constrained.  If a druggist or livery owed you money, you would wait, like any other creditor until cash came in and you got yours.  Not so with banks.  So, fear of default may well have been real for a few days.  How long that lasted and how far it spread is not well recorded.